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COLE SCHOTZ PC Court Plaza North 25 Main Case 21-10269-ABA Doc 218 Filed 02/12/21 Entered 02/12/21 17:18:03 Desc Main Document Page 1 of 140 COLE SCHOTZ P.C. Court Plaza North 25 Main Street P.O. Box 800 Hackensack, New Jersey 07602-0800 (201) 489-3000 (201) 489-1536 Facsimile Michael D. Sirota ([email protected]) Felice R. Yudkin ([email protected]) Jacob S. Frumkin ([email protected]) Matteo Percontino ([email protected]) Rebecca W. Hollander ([email protected]) Attorneys for Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW JERSEY In re: Chapter 11 CHRISTOPHER & BANKS CORPORATION, Case No. 21-10269 (ABA) et al., Jointly Administered Debtors.1 GLOBAL NOTES AND STATEMENT OF LIMITATIONS, METHODOLOGY, AND DISCLAIMER REGARDING DEBTORS’ SCHEDULES AND STATEMENTS The Schedules of Assets and Liabilities and Statements of Financial Affairs (the “Schedules and Statements”) filed by Christopher & Banks Corporation and its subsidiaries as debtors and debtors in possession in the above-captioned chapter 11 cases (the “Debtors”) include financial information that is unaudited and was prepared pursuant to section 521 of 1 The Debtors in these chapter 11 cases and the last four digits of each Debtor’s federal tax identification number, as applicable, are as follows: Christopher & Banks Corporation (g5422), Christopher & Banks, Inc. (1237), and Christopher & Banks Company (2506). The Debtors’ corporate headquarters is located at 2400 Xenium Lane North, Plymouth, Minnesota 55441. 61893/0001-40056657v2 Case 21-10269-ABA Doc 218 Filed 02/12/21 Entered 02/12/21 17:18:03 Desc Main Document Page 2 of 140 chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) and Rule 1007 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) in conjunction with the Debtors’ management and advisors. Although the Debtors’ management team has made reasonable efforts to file complete and accurate Schedules and Statements based upon the information available to it at the time they were prepared, a variety of factors, including, among other things, the complexity of the Debtors’ business operations, makes it such that the Schedules and Statements remain subject to further revision and verification by the Debtors. The Debtors reserve the right to amend their Schedules and Statements from time to time as may be necessary or appropriate. See Fed. R. Bankr. P. 1009 (“A voluntary petition, list, schedule, or statement may be amended by the debtor as a matter of course at any time before the case is closed.”). The Global Notes and Statement of Limitations, Methodology, and Disclaimer Regarding Debtors’ Schedules and Statements (the “Global Notes”) is incorporated by reference in, and comprises an integral part of, the Schedules and Statements and should be referred to and reviewed in connection with any review of the Schedules and Statements. [remainder of page left intentionally blank] 2 61893/0001-40056657v2 Case 21-10269-ABA Doc 218 Filed 02/12/21 Entered 02/12/21 17:18:03 Desc Main Document Page 3 of 140 INTRODUCTION 1. Bankruptcy Case. On January 13, 2021 (the “Petition Date”), each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code, commencing the above-captioned chapter 11 cases in the United States Bankruptcy Court for the District of New Jersey. The Debtors are operating their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. As of the date hereof, no request has been made for the appointment of a trustee or examiner. 2. Basis of Presentation. The Schedules and Statements do not purport to represent financial statements prepared in accordance with Generally Accepted Accounting Principles (“GAAP”), nor are they intended to fully reconcile to any financial statements otherwise prepared and/or distributed by the Debtors. 3. Amendment. While reasonable efforts were made to file complete and accurate Schedules and Statements, inadvertent errors or omissions may exist. The Debtors thus reserve the right to amend and/or supplement their Schedules and Statements from time to time as may be necessary or appropriate. See Fed. R. Bankr. P. 1009. 4. Recharacterization. The Debtors have made reasonable efforts to characterize, classify, categorize, or designate the claims, assets, executory contracts, unexpired leases, and other items reported in the Schedules and Statements correctly. The Debtors may, however, have improperly characterized, classified, categorized, or designated certain items. As such, the Debtors reserve all right to recharacterize, reclassify, recategorize, or redesignate information reported in the Schedules and Statements at a later time, as necessary or appropriate, as additional information becomes available, including, but not limited to, whether contracts listed herein were executory as of the Petition Date or remain executory post-petition. 3 61893/0001-40056657v2 Case 21-10269-ABA Doc 218 Filed 02/12/21 Entered 02/12/21 17:18:03 Desc Main Document Page 4 of 140 5. Summary of Reporting Procedures. The following conventions were adopted by the Debtors in the preparation of the Schedules and Statements: a. Asset/Liability Presentation. The Debtors’ fiscal year is based on a “4-5- 4” calendar promulgated by the National Retail Federation. All asset information contained in the Statements and Schedules, except where otherwise noted, is as of the Petition Date. The liability information, except where otherwise noted, is as of the Petition Date. Unless otherwise noted, the Debtors have indicated net book values for assets as of the Petition Date in their Statements and Schedules. b. Leases. In the ordinary course of business, the Debtors lease real property and various articles of personal property, including furniture, fixtures, and equipment, from certain third-party lessors. Every attempt has been made to set forth all such leases in the Schedules and Statements. Leased or owned property or assets may not be specifically designated as such in the Schedules and Statements and/or may not be specifically designated as property or assets of third parties within the control of the Debtors. Nothing in the Schedules or Statements is or shall be construed as an admission or determination as to the legal status of any lease (including for the purposes of whether to assume and assign or reject a lease or whether a lease is a true lease or a financing arrangement), and the Debtors reserve all rights with respect to all such issues. c. Contingent Assets. The Debtors may possess certain claims and causes of action against various parties, including contingent claims in the form of various avoidance actions they could commence under the Bankruptcy Code and other relevant non-bankruptcy laws. The identity and amounts of those claims and causes of action, if any, are not yet known and, therefore, the Debtors reserve all rights with respect to any 4 61893/0001-40056657v2 Case 21-10269-ABA Doc 218 Filed 02/12/21 Entered 02/12/21 17:18:03 Desc Main Document Page 5 of 140 claims, causes of action, or avoidance actions. Nothing contained or omitted in these Global Notes or the Schedules and Statements shall be deemed a waiver of any such claims, avoidance actions, or causes of action or in any way prejudice or impair the assertion thereof. d. Classifications. Listing a claim (i) on Schedule D as “secured,” (ii) on Schedule E as “priority,” or (iii) on Schedule F as “unsecured nonpriority,” or listing a contract on Schedule G as “executory” or “unexpired,” does not constitute an admission by the Debtors of the legal rights, if any, of the claimant or a waiver by the Debtors of their rights, if any, to recharacterize or reclassify such claim or contract. In particular, the Debtors reserve the right to amend the Schedules and Statements to recharacterize or reclassify any such contract or claim. e. Disputed, Contingent, and Unliquidated Claims: Schedules D, E, and F permit the Debtors to designate claims as contingent, unliquidated, and/or disputed. Notwithstanding the Debtors’ failure to designate any claim on any of these Schedules as contingent, unliquidated, and/or disputed, the Debtors reserve all rights to dispute, or assert offsets or defenses to, any claim reflected on the Schedules as to amount, liability, or status. [remainder of page left intentionally blank] 5 61893/0001-40056657v2 Case 21-10269-ABA Doc 218 Filed 02/12/21 Entered 02/12/21 17:18:03 Desc Main Document Page 6 of 140 SCHEDULES AND STATEMENTS 1. Schedule A/B a. Personal Property. The Debtors reserve all rights to recategorize and/or recharacterize the asset holdings described on each Schedule A/B at a later time to the extent they later determine that such holdings were improperly reported. b. Question 3 (Checking, savings, money market, or financial brokerage accounts). The Debtors have reported their bank balances as of January 2, 2021, which was the end of their last full pre-petition calendar month.2 The Debtors have reported these balances on a book cash balance basis such that these balances reflect outstanding checks. This practice is consistent with the Debtors’ regular accounting practices. c. Question 21 (Finished goods, including goods held for resale). “DC – 00096: SHORTAGE STORE” (“Store 96”) reflects a negative balance because the Debtors use this “store” to true up inventory where, for example, they locate product in their distribution center not otherwise accounted for on their books or where a store receives product for an unknown reason. In each instance, the Debtors reduce the inventory on their books for Store 96 and increase the inventory on their books for the store the product is shipped to. The purpose of maintaining a book entry for Store 96 is to keep total inventory stated at cost and to keep the Debtors’ retail stores accountable for the product they receive.
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